How rising energy costs savage growth
“Given the energy cost increases that are coming through right now, we’re trying to outrun a bear, and I’m not sure we can.”
That’s the graphic description, given by Mr Brad Banducci recently, of the challeges facing the food and beverage sector. Rising energy costs continue to
impact business. A recent survey by the Australian Meat Industry Council showed that energy costs were an average of 30% higher in 2016 over costs in 2010.
Mr Banducci, the Woolworths CEO, was quoted recently in the Financial Review as saying “We manage what we can manage with energy efficiency. But given the energy cost increases that are coming through right now, we’re trying to outrun a bear, and I’m not sure we can.”
Harry Debney, chief executive of the nation’s biggest fruit and vegetable producer, Costa Group, told the Global Food Forum news in Melbourne, end of March, that he was seeing a 20 per cent cost increase to his operations as a result of soaring power costs.
Other major concerns
“But the biggest concern we have got is actually continuity of supply,” he said. “We have just spent $2m at our mushroom plant outside Melbourne to put in back-up generators! It’s a pretty sad situation when companies like us have to spend money just on the off-chance we lose power. That is not a productive use of capital.”
Certainly not! But if you were forced to produce your own electricity, wouldn’t it make you so much more particular about how much electricity got used?!
And not many small to medium businesses are better than Woolworths or Costa Group at outrunning bears! What to do?
Good news is, it’s now easier than ever to make that all important thorough assessment of your energy usage, and then look at ways it can be minimised.
Lighting makes contributions to energy consumption, productivity, safety, security and maintenance. When assessing lighting energy usage it’s important to look for other improvement opportunities; planning around all the areas light can impact, and including cost inputs like maintenance, installation, overhead contamination risks and so on will help offset energy costs too.
Creative approaches are needed to coordinate the power of LED solutions to beat the rising cost of energy.
When it comes to the food and beverage industry especially, suitable LEDs have so many advantages over legacy lighting technologies.
There are the obvious wins, such as no glass or other breakable materials and no toxic mercury that could fall and contaminate food products, but there are also the higher efficacies, programmable dimmability, DALI control, motion activation, instant-on performance, as well as lower power usage, that all add up to major improvements in lighting performance.
Woolworths and other major corporations employ energy management specialists to implement strategies around all these advantages, when it comes to the lighting component of their brief.
In the controlled environments of most food processing plants, the LED also has the benefit of very long life. Your warehouse may not be temperature controlled, but at the low temperatures of cold storage facilities LED life is extended exponentially, and any facility consistently maintained at under 30C will achieve results in the vicinity of 70,000 hours.
Even at 24/7 operation, that equates to over 8 years before you pay someone to get up there again and touch it.
Maintenance and Reliability.
Servicing overhead fixtures and services involves a range of cost issues.
Because there’s more to lighting costs than the power they consume. In many facilities, there are considerable obstacles to lighting maintenance, access is a serious pain, and yet lighting is an auditable item.
Lux levels for various areas of a facility are given in USA Standards, and maybe you’ll want to know how your facility measures up!
With LED lighting solutions, you have the advantage of knowing that, if you’re going to pay Maintenance to get up there and attend to that light, it’ll be the last time for years and years.
A complete strategy around rising energy costs helps deliver certainty in the outcome!